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GAO-02-726R 1 (2002-06-28)

handle is hein.gao/gaobaalzy0001 and id is 1 raw text is: i . A Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 June 28, 2002 The Honorable Paul Sarbanes Chairman The Honorable Phil Gramm Ranking Minority Member Committee on Banking, Housing, and Urban Affairs United States Senate The Honorable Wayne Allard Ranking Minority Member Subcommittee on Housing and Transportation Committee on Banking, Housing, and Urban Affairs United States Senate Subject: Community Investment: Los Angeles's Use of a Community Development Block Grant Exemption Under the Department of Housing and Urban Development's (HUD) Community Development Block Grant (CDBG) program, entitlement communities'-also called grantees-receive funds that they can spend to support specific community development activities, such as rehabilitating housing, improving public facilities, and providing public services.2 Most grantees are prohibited by statute from spending more than 15 percent of their CDBG funding on public service activities, such as child care, health care, and crime prevention. However, in the aftermath of the 1992 Los Angeles civil unrest, the Congress gave an exemption from this statutory cap to two grantees-the City of Los Angeles and the County of Los Angeles-allowing them to spend up to 25 percent of their funds on public services. In December 2001, the exemption was extended through 2003-this was the most recent in a series of extensions. Because of concerns about these two grantees' efforts to transition to the statutory levels for public service spending, you asked us to report on how the city and county (1) used their CDBG funding to provide public services during the 'Entitlement communities are central cities of Metropolitan Statistical Areas, other metropolitan cities with populations of at least 50,000, and qualified urban counties with populations of at least 200,000 (excluding the populations of entitled cities). Entitlement communities develop their own programs and funding priorities. 2Public services include child care, health care, job training, recreation and education programs, public safety services, services for senior citizens and homeless persons, and drug abuse counseling and treatment. CDBG funding for public services is subject to several restrictions, such as a prohibition on funding services that were provided by the local government during the preceding 12 months. GAO-02-726R Los Angeles CDBG Public Service Funds

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